Balcerowicz foresees steady inflation despite energy price uncertainty

National Bank of Poland (NBP) governor Leszek Balcerowicz said yesterday that inflation is not likely to pick up significantly in the coming months. The NBP has targeted this year's consumer price index (CPI) at 5% in D ecember, with a one percentage point tolerance margin on each side. This target, which central bankers are widely expecting to be met, means the NBP sees consumer prices picking up at some point this year from the December 2001 rate of 3.6%. "There are various forecasts relating to inflation. The majority of them suggest that we should not really expect any significant rise," Balcerowicz told reporters. "A lot will depend on the impact of administrative price increases, particularly energy. Here we have some uncertainty," he pointed out. The NBP says uncertainty over the impact of fiscal policy and global growth on price pressures in Poland has prevented a significant easing of its steep borrowing costs, which are among the highest in Europe in real terms. The NBP's rate-setting Monetary Policy Council (RPP) is expected to cut its main market rate by 150 basis points from the present 11.5% at its next meeting on January 29-30. (Reuters)